Building wealth typically requires regular savings and a disciplined approach to investing. Unfortunately, these things are easier said than done.
Thankfully, automatic investing apps make it easier for regular people to become excellent investors. They can be great "set it and forget it" options for buy-and-hold investors who aren't interested in short-term trading.
Below, we break down our top three automatic investment apps of 2021 before sharing a few more apps that didn't quite make our list but may still be worth considering.
Our Picks Of The Top Automatic Investment Apps Of 2021
After reviewing more than two dozen top brokers and micro-investing apps, we’ve narrowed down the best automatic investment apps to these three.
M1 Finance frequently tops our “best of” investment lists. The top-notch interface, low fees, and customizable investment pies make it a great choice for investors seeking a disciplined, but unique investment experience.
M1 Finance allows users to opt into “Auto-Invest”. With auto-invest, M1 Finance’s algorithms will rebalance your portfolio anytime you have at least $25 in cash in the account. This “smart” rebalancing automatically keeps investors more in line with their stated goals.
Since M1 Finance supports Roth, Traditional, and SEP IRAS it allows many investors to automate tax-advantaged investments. It also supports individual and joint brokerage accounts.
Charles Schwab Intelligent Portfolios
Charles Schwab Intelligent Portfolio is a free robo-advisory service for people with at least $5,000 in their accounts. The Intelligent Portfolio app makes it easy to set up recurring transfers to the account.
Users select from several different pre-designed portfolios that invest in 51 broadly diversified, low-cost ETFs. Whenever money hits the account, Schwab automatically invests the money to rebalance the portfolio.
However, the app also follows tax-loss harvesting laws to help minimize taxation (only for taxable accounts with balances over $50,000). This type of efficient investing is somewhat complex to do manually, so it’s nice to see the robots taking over complex but routine tasks.
The only major drawback to the Intelligent Portfolio’s app is the high cash position. Most portfolios hold between 6-30% of the portfolio in cash which can be a drag on the overall performance of the portfolio (especially when the investment horizon is several decades).
Robinhood is known for its commission-free trades but it also has excellent automation features. While it doesn't support mutual funds or ETFs, it does allow users to set up recurring investments into fractional shares of stocks. This means that even smaller investors can dollar-cost average into some of their favorite positions.
Robinhood is an easy-to-use app and the recurring investment option is easy to find. Investors can change or increase their recurring investments whenever they want. So you won’t be locked into bad positions for too long. However, it doesn’t have any smart rebalancing options.
Other Automatic Investment Apps To Watch
While we chose just three top automatic investment apps, there were a few that just missed the cut. These honorary mentions deserve a shout-out as they can be a good fit for certain investors.
Webull is a great app for automating active trading. With no commissions and a wealth of information, it’s a top choice for active traders. But it’s also a great place for investors looking to automate their buying.
Automating active trading may seem like an oxymoron. But in this case we mean that it allows users to set up buy and sell prices that the app then handles. This is far easier in Webull than in most apps. However, this brokerage doesn’t support fractional shares at this time.
Public offers DRIP, but it doesn’t offer an obvious way to set up recurring investments at this time. Part of this may be intentional. Public wants users to buy into the social aspect of stock market investing. And automated investing doesn’t fit with that. However, we’re watching this rising star that already promotes fractional share investing and commission-free trading.
Blooom offers 401(k) and other account management. On Blooom's DIY plan, which costs $45 per year, its robo-advising technology will give you investing recommendations. But if you upgrade to the $120 per year Standard Plan, Blooom can place the trades on your behalf. This can be a great deal for investors who have “iffy” options in their 401(k) plans.
Apps That Just Missed The Cut
Several robo-advisors, including Wealthfront and Betterment, make it easy to automate your investing as well. But their modest fees and limited control over portfolio selection gave us pause in calling them top automatic investing apps. They could still be worth considering, though, especially if you're looking for excellent goal-setting tools. See all of our favorite robo-advisors >>>
What Makes An Automatic Investing App Great?
These days most investment platforms allow some form of recurring investments. However, great automation is about more than just allowing users to automatically transfer funds to their accounts. To create our list, we considered five major criteria:
Why Don’t Micro-Investing Apps Make This List?
Micro-investing apps specialize in investing tiny amounts of money. They often give users the ability to buy fractional shares using just a few dollars at a time. They may even connect to your checking account and “roll-up” transactions to the nearest dollar and skim the extra into your investment account.
The idea behind micro-investing apps is that a little bit of savings goes a long way. In some ways, this is true. However, most people will need to invest more than spare change to achieve their long-term financial goals.
And while the fees for these apps may seem low on the surface (usually $1-3 per month), when you compare them to relatively small investment balances, they can be shockingly high. For most people, setting up a $20-$25 per week auto-transfer into one of the apps listed above will yield better results than micro-saving.
Should You Use An Automatic Investing App?
If you’re serious about building wealth, we recommend employing some sort of helpful automation to keep you on track with achieving your goals. Simple steps like setting up recurring transfers to your investment accounts can ensure you’re moving in the right direction.
People who enjoy playing around in their investment account, reading investment news, and researching new stocks probably don’t need to employ specific investing automation technologies (beyond regular savings). If this is you, you can likely trust yourself to buy new stocks and keep yourself invested.
However, those who aren’t disciplined about tracking investments and buying new shares should consider automatic investments. Life happens, but most people want to stay invested even when they can’t stay attuned to their portfolio. For those in this category, automatic investment apps are a great fit.
Hannah is a wife, mom, and described personal finance geek. She excels with spreadsheets (and puns)! She regularly explores in-depth financial topics and enjoys looking at the latest tools and trends with money.